Hundreds of workers at Rugby's Alstom plant were celebrating today after the French government saved the crisis-hit firm with a rescue package.

Fears had been growing that jobs in Rugby's turbine division would be lost after the ailing engineering giant announced that debts had pushed it to the edge of bankruptcy.

However, over the weekend the French government - led by French prime minister Jean-Pierre Raffarin - met with banks and hammered out a 3.2billion euro rescue package to save the firm.

The last-gasp deal was finalised yesterday just hours before the firm was forced to declare itself bankrupt.

Under the new plan - which still has to be approved by the EU - the French government will not become a direct shareholder in the group, but banks and the government will instead take on some of the firm's debts.

Union officials in Rugby have welcomed the news.

Tom Keogh, Coventry and Warwickshire regional officer for the union Amicus, said today: "There has been a collective sigh of relief because they were looking at redundancies with the company going into liquidation.

"Now, as far as we are concerned there will be no job losses here."

Patrick Kron, the Alstom chairman, said: "The package provides Alstom with a strong base from which to move ahead."